Title Policy Corner: An Overview of the ALTA 9 Series Endorsements

In 2012, the
ALTA Forms Committee adopted significant changes to the series of ALTA 9
Restrictions, Easements and Agreements (REA) endorsements, not only to clarify
the specific extra title coverage provided, but also to address the result of
litigation about a Schedule B exception for an REA. The old “plain
Jane” ALTA 9 endorsement provided coverage to an owner or a lender against
three major title issues: violations of recorded REAs that could affect
the validity of title or the lien status of a mortgage, encroachments, and
mineral rights. Now, the Committee has separated coverages for these
issues into ALTA 9 (REA), ALTA 28 (encroachments), and ALTA 35 (mineral
rights). Below is an explanation of the latest ALTA 9 series
endorsements.

ALTA Form
9-06 Loan policy:
This endorsement contains all the coverages provided under the old ALTA 9 except that it removes coverage over any
encroachment from adjoining property (or onto adjoining property) that is
identified in the Schedule B exceptions. The change is handled primarily through
a clarification of what constitutes a “violation".Disclosure of a known violation in the
Schedule B exceptions removes that violation from coverage under the ALTA 9-06
endorsement.

ALTA Form
9.1-06 Unimproved land — Owners Policy: This form endorsement only addresses
covenants and restrictions. The ALTA 28.1 and ALTA 35 endorsements must
be added to address encroachments or mineral rights.

ALTA
9.2-06 Improved land — Owners Policy: Revisions to this form endorsement
also only addresses covenants and restrictions. Coverage for
encroachments (ALTA 28.1) and mineral rights (ALTA 35) must be addressed
separately as additional endorsements.

ALTA
9.3-06 Loan Policy:
Like the ALTA 9.2-06 for Owners Policies above, this endorsement only addresses
covenants and restrictions and any coverage for encroachments or mineral rights
would be dealt with by separately under the ALTA 28 or ALTA 35 series of endorsements.

ALTA
9.6-06 Private Rights — Loan policy: This endorsement provides coverage
to the lender against loss that results from the invalidity, unenforceability
or lack of priority of the insured mortgage arising from “private rights” such
as a private charge or REA assessment, option to purchase, right of first
refusal, or right of prior approval of a future purchaser or occupant.

ALTA
9.7-06 Land under Development — Loan policy: This endorsement is substantially
similar to the ALTA 9-06 discussed above, providing the broadest form of
coverage to the lender, but is only used for issuance on a future development
site. In order to provide this endorsement, the title office needs a
specifically identified set of building plans and specifications that it can
compare against any recorded restrictions.

ALTA
9.8-06 Land under Development — Owners
policy: This
endorsement is substantially similar to the ALTA 9.2-06, except that it applies
to future development. It does not contain any coverage against encroachments
or mineral rights. In order to provide this endorsement, the title office needs
a specifically identified set of building plans and specifications that it can
compare against any recorded restrictions.

ALTA
9.9-06 Private Rights — Owners policy: This endorsement provides coverage
to the owner against loss that results from the invalidity of the insured title
arising from “private rights” such as options to purchase, right of first
refusal or right of prior approval of a future purchaser or occupant.

Overall,
the revised ALTA 9 series is designed to provide owners and lenders with
flexibility in being able to choose their desired coverage based on the
specifics of the real estate transaction.

***

In a future
blog post, Fidelity National Title will review the new ALTA 28 and ALTA 35
endorsements.

If anyone has
questions about any of the endorsements discussed in this blog article, they
can contact Jeremy Freed, Commercial Underwriter on the National Commercial
Services Team at Fidelity National Title (Jeremy.freed@fnf.com)
or 800.626.9881 or 614.818.4822.

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